Orzag will also identify areas where the government believes there is significant duplication and waste.

Washington (CNN) - Office of Management and Budget Director Peter Orszag will announce Tuesday morning that the Obama administration is directing agencies to cut at least 5 percent from their budgets. This comes in addition to the president's pledge to freeze spending at most agencies over the next three years.

In excerpts provided by the OMB, Orszag will address the Center for American Progress, saying "...in the budget guidance for Fiscal Year 2012 issued to agencies this morning ...We are asking each agency to develop a list of their bottom 5 percent performing discretionary programs, as measured by their impact in furthering the agency's mission.

"In addition, to ensure that we can meet the president's insistence on a freeze for non-security agencies while funding priority areas, we are asking non-security agencies to specify how they would reduce their budgets by 5 percent - which will give us the ability to achieve the overall non-security freeze even while meeting inevitable new needs and priorities."

Orszag will also identify areas where the government believes there is significant duplication and waste. Orszag will say "as stewards of the American people's tax dollars, we cannot afford to waste money on programs that do not work, that are out-dated, or that are duplicative of one another."FULL POST

BAYAMON, Puerto Rico (CNN) - Sens. Hillary Clinton and Barack Obama took their campaigns to the U.S. territory of Puerto Rico on Saturday in an effort to woo voters before the June 1 primary.

There are 55 Democratic delegates up for grabs, though voters cannot take part in the general election in November.

Obama campaigned early Saturday at the University of Puerto Rico in Bayamon, where he praised the nation's veterans before Memorial Day.

"It's fitting to be here today, not just because Memorial Day is around the corner but because Puerto Ricans are such an important part of the United States military. On this island and in Puerto Rican neighborhoods across America, you can go into almost any home and find a veteran living there or a photograph of a loved one in uniform hanging on the wall," he said.

Obama also took aim at Republican Sen. John McCain over his opposition to an update of the GI Bill. The legislation passed the Senate on Thursday afternoon by a 75-22 vote and passed the House this month by a similar margin. It proposes to essentially provide a full scholarship to in-state public universities for members of the military who have served for at least three years.

"I don't understand why John McCain would side with George Bush and oppose our plan to make college more affordable for our veterans. ... Putting a college degree within reach for our veterans isn't being too generous; it's the least we can do for our heroes," Obama said.

Shortly after Obama's remarks, the McCain campaign hit back.

"Barack Obama talks about helping veterans, but when the choice came between delivering for our military men and women and playing partisan politics, he decided politics was more important," McCain spokesman Brian Rogers said Saturday.

Clinton, meanwhile, hosts a "Solutions for Puerto Rico's Families" town hall in Aguadilla on Saturday.

Clinton has done well among Hispanic voters in this year's primaries. She is expected to do well Puerto Rico's primary; Puerto Ricans make up a large swath of her New York constituency.

(CNN) - Several close friends and supporters of Hillary Clinton tell CNN they are pushing for a "graceful exit strategy" that would allow the Clinton and Obama camps to come together, and for the New York senator to save face should she fail to become the Democratic nominee for president.

The discussions are not taking place between the campaigns, but rather among informal campaign advisers on both sides who are trying to actively influence and shape the debate as the competition nears a close June 3.

Bill Burton, national spokesman for front-runner Barack Obama's campaign, said "there are no talks underway between the campaigns," and that any suggestion from Clinton insiders is "unequivocally untrue."

"We are two campaigns, in real competition, not having any such talks about exit strategies," Burton said.

Obama campaign chief strategist David Axelrod said "there have been zero discussions, back channel or otherwise between the campaigns."

Clinton campaign aides also deny that any talks are taking place between the campaigns, emphasizing that the contest is not yet over. Clinton herself said the report was "flatly untrue" during a meeting with the editorial board of a South Dakota paper Friday.

But some Clinton camp insiders and close friends are actively floating three scenarios which they believe will influence whether or how the two teams merge.

(CNN) - CNN has confirmed that former Democratic presidential candidate John Edwards will endorse Barack Obama shortly at a Michigan campaign event.

The endorsement could help Obama reach out to white, blue-collar voters - a demographic group that Obama has failed to capture, most notably in the recent Pennsylvania and West Virginia primaries.

Edwards received 7 percent of the vote in Tuesday's West Virginia contest.

The former North Carolina senator had campaigned on the message that he was standing up for the little guy, the people who are not traditionally given a voice in Washington, and that he would do more to fight special interests.

After dropping out of the race on January 30, Edwards asked both Clinton and Obama to make poverty a central issue of the general election and a future Democratic administration, something both agreed to do.

Tonight won’t do much to change the delegate gap, say Barack Obama’s senior aides – and any day they break even makes it that much tougher for Clinton to make up the shortfall.

"We think we won a really big victory here tonight - it insures that regardless of what happens in Indiana that we are going to extend our delegate lead," senior adviser David Axelrod told reporters. "We have taken another big step down the road here… The important thing is that this was not a game changer, folks, in any way, shape or form."

Earlier in the week, Clinton had said a win in North Carolina could be a “game changer.”

But Deputy Communications Director Phil Singer reminded reporters that Barack Obama had said that Indiana might be the “tiebreaker,” given Clinton’s victory in Pennsylvania and his expected win in North Carolina.

Indiana may not be in the win column at this point in the evening, but they say the exit polls out of both states Tuesday night have bolstered their electability argument: they show Obama’s supporters are more likely to support Clinton in the fall than vice versa.

At the heart of their thinking: Florida and Michigan. Together with Ohio, says the Clinton team, those three states are vital to any Democratic win – and the New York senator has claimed all three.